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Best Stocks to Buy for 2018 in India

Best Stocks to Buy for 2018 in India

The year 2017 has been a mix of some uncanny events. While, some deliberately forced the markets to dip, others supported the indices to gain momentum. So what shall investors expect from 2018 and what could be some of the best stocks for 2018 to add to your portfolio in the next few months.

After sound analysis and some contemplation, we have picked a bunch of stocks that if researched and added to your portfolio can reap healthy returns. For various investors the definition of sound investing differs. While some are always on the lookout for best stocks in their growth phase, some go in for value investments that are consistent and can prove to be multibaggers in the long run.

The following list of best stocks is categorized under Large-Cap, Mid-Cap and Small-Cap based on certain specific parameters and fundamental analysis.

Best Large Cap Stocks for 2018

Companies that have grown with the market and are now steady performers

Tata Motors

With an insightful product line and an ever-increasing growth in the sector the stock is awaited to regain its lost charm. A dip in net profit should not deter investors’ expectation. In accordance with high sectoral growth and robust financial the stock is a must have in your portfolio. The current market price provides an opportunity to enter.

Best Stocks for 2018 Tata Motors details

Financial Insights for Tata Motors

ITC Limited

A stock with a comprehensive market share. I stated “Comprehensive” because of its product line and how well the company has pulled out in the tobacco market. The company has managed to decrease debt by huge proportion and has managed to bring its current ratio from 1.70 in 2013 to 3.59 in 2017. The stock has a lot of potential in terms of its financials which will be reflected in its stock price soon.

Best Stocks for 2018 ITC Limited financial details

Financial Insights for Tata Motors

Motherson Sumi

A popular name for equity mutual funds and value investors, the stock has always portrayed sound financials within the industry and between peers. The company has managed to increase its asset base as a firm in the Auto Ancillary sector with a robust P/E which is evident from fundamentally strong revenue growth. The stock is currently trading at less than its 52 week high and could be a good investment if you are looking at a 5-7 year horizon.

Best Stocks for 2018 Motherson Sumi financial insights

Financial Insights for Motherson Sumi

Best Mid Cap Stocks for 2018

Value is what a company generates, Returns are what Investors Get

As a value investor myself I am always on a lookout for firms which exhibit strong financials and a unique product composition. Most companies in the mid-cap space have outperformed markets on various fronts teamed with intense risk. While going in for mid-caps seek companies which have a robust moat or a deliverable competitive advantage, difficult to replicate.

Minda Industries

With a CAGR (Compounded Annual Growth Rate) of 20-25% due to strong sectoral growth clubbed with addition of new products the stock is currently trading at an all-time high. The company has carved a niche for its products in the Auto Ancillary sector with robust margins, additional capacities and dynamic improvement in its top-line numbers. I first came across this stock when I was seeking the portfolio of a mutual fund that I owe in March 2016 and ever since then, it has been on a splurge.

Best Stocks for 2018 Minda Industries financial insights

Financial Insights for Minda Industries

Aurobindo Pharma

If you glance at both the top and bottom line figures of the firm, you can see evidences of the turnaround the company has witnessed. A lot of portfolios have been shuffled in contrast with Sun Pharma where people are relying on Aurobindo for its viable growth. The stock seems reasonably placed and with growth resonating every quarter you can’t aim to miss on the huge potential it stores. Profit making capabilities of the firm is intense, so are the unique markets it seeks to enter like Europe for inorganic growth. Its specialized segments include drugs for a wide variety of generic and contractual ailments and diseases.

Best Stocks for 2018 Aurobindo Pharma financial insights

Financial Insights for Aurobindo Pharma

Amara Raja Batteries

Though the stock seems a bit over-valued than its peers in the auto battery space, it’s a good inclusion in your portfolio. The stock has provided close to 30% returns in the last successive years on a per year basis. Last week the shares of the company saw a tremendous intra-day hike of 4.7% after it commissioned a two-wheeler battery plant in Chittoor. The management of the company inflicts a sense of comfort since it seeks to enhance its company’s operation through expansion.

Best Stocks for 2018 Amara Raja Batteries financial insights

Financial Insights for Amara Raja Batteries

Best Small Cap Stocks for 2018

Small seems nasty but returns on these stocks can be a game changer and might turn out to be the best stocks for your portfolio.

Ultramarine and Pigments Ltd.

With a 20% rise in its stock price, the company is hard to neglect. The company posted exquisite revenue numbers for Q2, with consistency in net profit and an ever rising product demand. The stock has outperformed market on various levels in the last one year.

Best Stocks for 2018 Financial Insights for Ultramarine & Pigments Ltd

Financial Insights for Ultramarine & Pigments Ltd.

Sanwaria Consumers

The company entered as an agro oil manufacturer but later transformed its operations into deeming a complete package to consumers. The company is a bit over-valued if compared with the industry multiple but still seems a reasonable buy when fundamentals are closely analyzed. Which firm has such robust profits and an asset line in close sync with it market cap. Even if as an investor you are reluctant to add this in your portfolio it could be a great addition to your watchlist. In contrast, the transformation has yet to be tested in close waters with industry peers and consumer space.

Best Stocks for 2018 Financial Insights for Sanwaria Consumers

Financial Insights for Sanwaria Consumers

With the new year around the corner, I feel as investors we must start to weed out sluggish performers and be on a hunt for companies that seem as prospective potential gainers in the long-run. Best stocks mentioned above have been analyzed on various fronts and might not fit in your requirement at some point but they are worth your research time.

 

Disclaimer: The article is in no way an advice to buy or sell any stock; rather it provides a base for the investor’s own research. Consult with a registered investment advisor, prior to making any trading decision of any kind.

14 Comments

14 Comments

  1. Ruchin

    December 23, 2017 at 5:26 pm

    Wow, that was a comprehensive list. I wish you could do specific articles on each of these stocks so we could see what all factors you have kept in mind while picking them. Can you please advice new investors like me on how I can identify stocks for my portfolio.

    • Tanya Sehgal

      December 25, 2017 at 12:25 pm

      Hi Ruchin,
      I am planning to do a more insightful article for individual stocks. For new Investors I would suggest to devote some time in analysing stocks and how the companies have been performing in terms of managerial commitments, introduction of new products and how well they are able to structure their operations.
      Rather than estimating a stock on quantitative factors in India, I have felt that quality of the stock matters a lot more. For the above article I have only explored some bottom line figures in order to provide an overview of concrete factors, though its not necessary that only these must be considered. Most of the stocks have some kind of historical backing and they have been able to keep consistency in their financial thus ensuring proper capital allocation.
      Thanks for the comment, will keep you updated on further research-based articles.

  2. Manhar

    December 23, 2017 at 6:00 pm

    Nicely written with good information.

    • Tanya Sehgal

      December 25, 2017 at 12:26 pm

      Thanks for dropping by Manhar. Keep reading !

  3. Sameer

    December 23, 2017 at 6:59 pm

    Good work Tanya. Keep it up. 👍🏻

    • Tanya Sehgal

      December 25, 2017 at 12:26 pm

      Thanks a ton for the appreciation Sameer. I hope you liked the information

  4. Ruchi

    December 24, 2017 at 6:06 am

    Insightful quality representation

    • Tanya Sehgal

      December 25, 2017 at 12:28 pm

      Thanks Ruchi. Stay tuned for more such articles.

  5. Divyanshu

    December 24, 2017 at 8:11 am

    Hi Tanya,
    Great to have come across this article. Can you please do a separate article on Motherson Sumi and Minda Industries please. I have been tracking the stocks for quite sometime now (thats’w what brought me here) and want to add them to my portfolio. Can you please do an article for these individual stocks by next week. It would be helpful.

    Thanks,
    Divyanshu

    • Tanya Sehgal

      December 25, 2017 at 12:27 pm

      Hi Divyanshu,
      I will try to do an article on these two companies soon. I feel they have been doing quite well in terms of enhancing their product base and injecting value to their stocks. Both the companies are from the Auto Ancillary space. On one hand where Minda has beaten the markets in all its operative capabilities (whether its auto lighting, switches or horns), the company has come up with a new plant in Gujarat tying up with Maruti and revenue are expected to reflect the growth. Its a stock to vouch for even after last year when the stock slowed down after demonetisation since more 50% of its revenue is from the two-wheeler segment.
      On the other hand we have Motherson Sumi, has a fairly hight ROCE (Return on Capital employed) and deserves a Buy because of its premium valuation. There has been a considerable slump in recent times in its stock price but consolidated earnings will surely rise in the next few years because of its diverse product line in the auto space (air filtration system, brakes, clutches and cylinder system).
      We can definitely cover more base in subsequent articles. Thanks for dropping by. Have a great year ahead.

  6. Ankit

    December 24, 2017 at 11:26 am

    Wondering analysis….

    • Tanya Sehgal

      December 25, 2017 at 12:28 pm

      Thanks for going past the article Ankit

  7. Pingback: GAIL India Share Price Hits Lifetime High, Should you Sell?

  8. prachi

    December 29, 2017 at 5:09 am

    Very informative and comprehensive list.

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